Analysts believe further tightening moves from other central banks will put downward pressure on the kiwi dollar. Global risk appetite will be key, as well.

“A rise in risk aversion is bad news for the illiquid kiwi, as New Zealand tries to fund its huge current account deficit,” Callow explains. We would like to sell NZD/USD on any rallies to 0.6300. Key support is at 0.5930.”

By year-end, Callow sees a possible retreat to 0.5700, which would be the currency pair’s lowest level since June 2003. Tim Mazanec, senior FX strategist at Investor’s Bank & Trust, says 0.6300 and 0.6425 are key resistance levels, noting the latter level represented resistance in April and May.

If gains push the currency through that resistance, he says, it would open the door to 0.6685, a Fibonacci retracement target from the 2006 high to low. However, he favors a weaker kiwi dollar in the weeks ahead, given his bias for higher U.S. rates. If the resistance zone holds, though, Mazanec expects a retest of the 0.5927 low.